Russia & North Korea
According to sources, it was Russia that provided North Korea with the technology to deliver ICBMs. The ties between Russia and North Korea are far greater than the press has let on.
The Cyprus Failure is the Euro Failure – Slovenia Next?
Cyprus joined the EU when the bloc launched its “big bang” expansion, opening the door to 10 mostly ex communist countries in 2004, which then swapped their individual currencies for euros a few years later. However, unlike Greece or the rest of Southern Europe, the banks in Cyprus suffered heavy losses due to large Greek bond holdings. Europe cannot blame Cyprus for a spending spree and not paying its bills. Cyprus got screwed by becoming a member of the Euro, its banks then being politically correct buying Eurozone bonds, and getting defaulted upon.
The core issue as to why the European Commission wanted to see Cyprus collapse because they were hosting offshore banking that was eight times the size of its economy. This is what was luring depositors, especially from Russia and Britain, who sought to avoid high taxes at home. Slovenia, which is the next Eurozone member to move into crisis mode, has a banking sector that is just 1.4 times as big as its economy, less than half the Eurozone average. Slovenia will collapse from a spending spree, not because it invested in Euro bonds.
It is true that Cyprus benefited from the cheaper funding as a Euro member as was the case for Ireland, Slovenia, and Spain, which were all on the periphery the Eurozone. This helped create inflated real estate bubbles primarily in Spain and Slovenia. In Slovenia’s case, this was exacerbated by a lack of adequate oversight in the state-owned financial system, where the banks were not privatized and this meant political corruption dominated. Keep in mind, Slovenia being formerly communistic, meant that when that fell, people were able to buy their homes for a few thousand dollars. Suddenly, the real estate picture behind the former Iron Curtain was a asset rich economy since there had been no mortgages. Debts then began to be marketed by Western banks with credit cards using the unencumbered real estate as collateral. – home equity loans.
This helped to produced excess liquidity that blurred the judgment of many in former communistic states. It became clear that in Slovenia, as most other former communistic states, there was a lack of experience in financial management among both the people and those then running state owned companies. Even the IMF predicts that Slovenia will need to recapitalize its three largest banks by €1 billion that are largely state owned, meaning at taxpayer expense for government mismanagement. This will be about 3 percent of GDP. The non-performing loans have reached almost 15 percent of the total banks’ loan books. It is true that Slovenia is not Cyprus. It is worse. There are no Russians and foreign depositors to wipe out, just taxpayers. Interest rates in Slovenia have reached almost 7 percent further rendering the economic conditions simply unsustainable for much longer.
So while everyone is swearing Slovenia is not Cyprus, that is the truth, but it is worse. Cyprus had a viable economy. It was cheated by the EU who wanted to see it fail because of its role in international banking. Slovenia has not real assets other than failed real estate bubbles and vacate foundation in the ground. Cyprus’ politicians have not stood their ground and allowed the future of the island’s economy to collapse to appease Brussels. That was a very unwise decision for at the end of the day, they will receive nothing in return but higher unemployment and social unrest. All of this was because they believed in the Dream of the Euro, bought Greek bonds, and despite the promises there would never be any default in Europe, they were sucker-punched, and knocked-out for the count.